Trustee abandonment/buyback question

[rcoveles]

I'm currently on the fence between doing a Chapter 13 and a Chapter 7. I can do 7, because most of my debt is non-consumer, related to buying inventory for my business, but I'm still keeping my options open as far as continuing the business under chapter 13.

I know there are probably a million variables, but I was wondering - my only real non-exempt asset is my business inventory, along with some musical instruments I use playing in a band on the weekends. (I live in PA who basically has NO exemption for tools of the trade, except a SEWING MACHINE!).

My business inventory is just novelty stuff - t-shirts, caps, stickers, patches, posters, small collectibles etc. (all music related).

If I do a 7, how likely is it that the trustee might just abandon the inventory? I mean - business is really really bad - if he thinks he can turn the stuff, more power to him. I'm not banking on him abandoning it, and am fully ready to turn it over if it comes to that.

Also, if the trustee were to make me a reasonable buyback offer for either the inventory or my instruments, would my wife be allowed to "loan" me the money? I'm filing alone, and I'm told anything that is just in her name would be exempt, as well as our house (tenancy by the entirety). Since we'd only be allowed to exempt $300 cash in our joint account, the money would have to come from somewhere. I've also read that they can offer you a payment plan over a year or so.

Anyone have any experience or opinion on this?

Thanks!

[AngelinaCat]

We filed Ch7 and are in Florida, which has poor exemptions also.

We bought our non-exempt stuff back from the BK estate. The trustee did discount much of it. We still had to pay $5400.00, but were able to pay $450.00 a month for 12 months.

As to the t-shirt stuff; that would probably be formally abandoned. I don't really see a trustee wanting to silk-screening on the side.

Good luck to you.

[rcoveles]

We filed Ch7 and are in Florida, which has poor exemptions also.

We bought our non-exempt stuff back from the BK estate. The trustee did discount much of it. We still had to pay $5400.00, but were able to pay $450.00 a month for 12 months.

As to the t-shirt stuff; that would probably be formally abandoned. I don't really see a trustee wanting to silk-screening on the side.

Good luck to you.

Thanks for the info! I'm dying to know this - did you physically have to take your stuff somewhere and leave it there, did they come and get it, or did it never physically leave your possession before you worked out a payment plan? I'm concerned, because like I said, I do pretty much make my entire living between the two things (business inventory and musical instruments). I've read that trustees really don't like to take away your ability to earn a living.

[jonance]

In my opinion, if your business isn't profitable and it is just a bunch of promotional "junk" (for lack of a better term, what the TT would see it as)...i would think they would abandon it. You can just buy back your instruments, if they even have an interest in that. You should also have a wild card, or if you have a home, have some unused exempt equity to protect it. That's what I did. I am in the 60 day club as a non-consumer now, the Trustee really wasn't interested in anything at all of mine.

[nerves]

Could you claim the instruments as a tools of the trade exemption? I would think this may be an option if you have proof they provide income for you (the trustee may not even ask for proof but at least you would have it ready in case they did).

[andysmom]

HI, there
I'm in PA too & going to be filing chapter 13. In PA you have the choice of using the PA exemptions or (the way more liberal) federal exemptions which do have musical instrument & tools of the trade exemptions.
We're using the federal exemptions for our 13.